Arms Dealers to the World

No one can accuse the defense industry of lacking audacity. Despite receiving vast sums of money from the Pentagon each year, and having much of Congress in their back pocket, arms manufacturers have been holding conference after conference of late complaining that big government is keeping them down. At a Heritage Foundation event in mid-October, at which industry officials gathered to discuss the burdens of arms-export regulations, Robert Bauerlein, a vice president at Boeing, griped: "Government fundamentally doesn't trust industry to do the right thing when it comes to export controls." This from a company that earlier this year was fined $15 million for illegally selling military technology to China.

Arms-export control is an obscure issue that can have deadly consequences, and it may become increasingly important in the coming years. The Aerospace Industries Association (AIA), an umbrella group for defense firms, is planning a big under-the-radar push to alter regulations on the global weapons trade. Most of the current rules are in place to prevent U.S. arms from being shipped to places where human-rights violations are occurring, or where arms could be diverted to the black market. But foreign sales are a lucrative business for defense firms -- last year alone, sales of military weapons by U.S. contractors to overseas governments reached $21 billion -- and so a little audacity could, in the end, pay off handsomely.

The United States' current system of export controls actually works quite well at clamping down on arms proliferation. "It's one of the best in the world in terms of preventing unauthorized end use of U.S. defense articles," says Matthew Schroeder, an arms-control expert with the Federation of American Scientists. Defense companies that wish to sell arms abroad must first apply for an export license, and the potential sale is scrutinized closely by a variety of agencies and Congress.

At the Heritage Foundation event, defense executives complained that that review can take months -- Charles Jameson, corporate director of export management for Northrop Grumman, called the process "excessive" -- but experts need time to check that the arms won't be used in ways harmful to U.S. security, and to put in place a monitoring system to ensure the buyer doesn't resell, or lose, sensitive military technology.

Arms-control experts worry that the AIA is pushing for reforms that would go beyond merely streamlining this bureaucracy. (In an interview, AIA executive vice president Mark Esper was vague as to what changes the group was lobbying the administration to make, insisting that he only wanted to make the process more "efficient.") During a defense industry conference at the Hudson Institute in December, the AIA hinted that it might push for a multi-tier licensing system, in which defense firms wouldn't need to apply for licenses before selling arms to certain key allies. The group has backed similar proposals before, and the problem is that even stable democracies, such as Canada and Britain, can pose proliferation risks without a rigorous monitoring system in place. In the late 1990s, for example, the then-General Accounting Office found that a licensing exemption for arms sales to Canada was a disaster: Front companies from Libya, Iran, and Sudan had entered the country and nearly succeeded in re-exporting arms back home.

Industry officials are also talking about lobbying for reforms that "don't require congressional action," as Esper put it. That's worrisome, because the executive branch has a long history of sending weapons into regions where human-rights violations are rampant. A recent report by the World Policy Institute found that in 2003, the last year for which data were available, the United States transferred arms to 18 of 25 countries involved in active conflict. (By rights, the Foreign Assistance Act should bar this sort of activity, but the law is vague and subject to interpretation.) The "war on terror" has given the Bush administration an excuse to lift bans on weapons sales to countries that have troubling records on proliferation and human rights -- including Pakistan, Tajikistan, Serbia, Armenia, and Azerbaijan -- all in the name of bolstering its allies.

Many of these arms sales do more to increase human misery than they do to combat al-Qaeda. Since 9-11, the Nepalese government, which has engaged in grave human-rights abuses in its war against Maoist insurgents, has received a tenfold increase in military aid to purchase U.S. weapons. Arms sales to Indonesia have fueled the government's brutal repression of Aceh province. Weapons exports can destabilize nations and regions, one reason why congressional oversight remains so necessary.

Defense industry officials offer several justifications for revamping the export-control process, arguing, for instance, that they need to share technology freely with allies if the United States wants to cooperate with them in battle. As Esper says, "It's difficult to fight as a coalition if our partners need to go back at 6 [p.m.] because they don't have night-vision goggles." Retired U.S. Army Colonel Daniel M. Smith, however, has argued that the key to solving interoperability problems is greater organizational coordination among allies, not weakening the arms-export control system.

Arms manufacturers also grumble that export controls are hampering their ability to compete on the global market, although proof is hard to come by. In fact, the United States is still far and away the top arms exporter on the planet, delivering $11.6 billion in arms last year -- 45.6 percent of the world's total, according to a recent report by the Congressional Research Service. There's little evidence that current regulations are cramping the defense industry in any significant way.

Congress is likely to put up a fierce fight to any proposed changes to the export control system. In the past, Republican Congressman Henry Hyde of Illinois used his perch as chairman of the House International Relations Committee to prevent the Bush administration from altering export procedures. His incoming Democratic replacement, Tom Lantos, is "on the same page," according to one arms-control lobbyist. A congressional staff member told me that if the administration tried to revive the drastic changes it floated three years ago, "There would be big trouble."

But the defense industry is still a force to be reckoned with in Washington, having spent more than $78 million on lobbying in 2005. (During the Hudson conference, one participant singled out two congressional staffers who have helped thwart past reforms, and suggested that some defense firm "make them offers they can't refuse.") John Douglass, the president of AIA, has said that his group plans to make sure that every presidential candidate in 2008 stakes a clear position on the issue, and suggested that Democrats might even be more open to facilitating U.S. cooperation with Europe through arms-export reform. "We're going to make this a big deal -- as big a deal as we can make it," said Douglass. That's reason enough to stay on alert.

Bradford Plumer is a reporter-researcher at The New Republic.

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